Question

Able Manufacturing makes large granite stone cutting equipment made to order. The budgeted direct labor hours for the coming year are 25,000 hours and the budgeted MOH for the same time period is $375,000.What is the predetermined MOH rate for the coming year?

Answer 1

The predetermined MOH rate for the coming year is $15 per direct labor hour.

Step-by-step explanation:

The predetermined MOH rate for the coming year can be calculated by dividing the budgeted MOH by the budgeted direct labor hours. In this case, the budgeted MOH is $375,000 and the budgeted direct labor hours are 25,000. So, the predetermined MOH rate is $375,000 / 25,000 = $15 per direct labor hour.